JPMorgan says a 2026 blue wave could slam AI data center stocks that now make up 45% of the S&P 500

Polymarket currently estimates an 85% chance of a "blue wave," which it defines as Democrats controlling at least 218 seats in the House and 49 seats in the Senate. That could be bad for stocks tied to AI data centers.

Dubravko Lakos-Bujas, a strategist for JPMorgan, wrote a note to investors outlining strategies to follow based on which parties take the House or Senate in the upcoming midterm elections.

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"If Republicans maintain control of Congress, that would likely provide the most supportive incremental federal policy backdrop for the AI/Infrastructure buildout," wrote Lakos-Bujas.

That scenario looks unlikely right now.

AI stocks make up 45% of the S&P 500 market cap. Your 401(k) could be exposed to the S&P 500, so it's important to know how the election will affect your portfolio. Here's what to know.

AI providers rely on data centers as a way to increase capacity, but Americans nationwide have responded harshly to politicians seeking to build them.

For many voters right now, the cost of data centers in their region is a hot-button topic. Many voters are also worried about the environmental impact of data centers.

Despite this, AI has become a key issue for the Trump administration. In December 2025, the Pentagon launched GenAI.mil, a platform encouraging AI use in the military. On September 29, 2026, Trump signed an executive order replacing the term AI with SI, an abbreviation meaning "super intelligence."

Many of Trump's most loyal followers — including billionaires Elon Musk and Larry Ellison — have companies that either operate AI data centers or rely on their continued growth.

Trump himself has spoken at political rallies defending data centers. At a rally on October 3, 2026, for Sen. Jon Husted, he spoke at length about data centers. Attendees were tepid in response, though.

Many Republicans believe that if Husted fails to win reelection, it could trigger a national shift in enthusiasm for data centers — forcing politicians to shift their positions.

A memo from the National Republican Senatorial Committee puts it bluntly: "This has become a sleeper issue for the entire election cycle … If Husted loses because of data centers, the industry will be blamed, and elected officials or other parties will learn a cautionary lesson."

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The good news for most people is that regardless of what happens in November, the basics of saving for retirement don't change that much.

That's because the most common form of retirement account for most Americans, the 401(k), is rarely focused on individual stocks.

While some workers have access to self-directed brokerage accounts, the majority of companies do not opt to offer these types of accounts to their employees. Instead, most people just invest in funds that meet their needs.

401(k) accounts often offer hundreds of mutual funds that allow you to decide where your retirement funds go while still remaining accessible and straightforward.

For example, Fidelity offers mutual funds focused on large-, small- and mid-cap stocks, funds based on specific industries, funds focused on climate-friendly companies, and fixed income funds that are focused on generating long-term income.

Target-date funds are another easy option, designed to give you reliable growth over time and automatically shift your investments as you approach retirement.

Still, it's important to know what your 401(k) money is doing. If you haven't checked it in awhile, there's no better time than the present to make sure you understand how your money is allocated and why.

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This article originally appeared on Moneywise.com under the title: JPMorgan says a 2026 blue wave could slam AI data center stocks that now make up 45% of the S&P 500

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.